The Impact of COVID-19 Crisis on Italian Labour Law

The Impact of COVID-19 Crisis on Italian Labour Law Summary The﻿Italian﻿response﻿to﻿the﻿COVID-19﻿crisis﻿has﻿involved﻿a﻿general﻿lockdown﻿of﻿all﻿nonessential﻿activities,﻿accompanied﻿by﻿significant﻿labor﻿litigation﻿and﻿social﻿security﻿measures.﻿The﻿overall﻿idea﻿behind﻿the﻿government’s﻿action﻿has﻿been﻿that﻿of﻿safeguarding,﻿as﻿ far﻿as﻿practicable,﻿ the﻿employment﻿level﻿and﻿income﻿of﻿workers﻿and﻿families,﻿notwithstanding﻿the﻿sharp﻿slowdown﻿of﻿business﻿and﻿professional﻿activities.﻿For﻿that﻿purpose,﻿ a﻿ temporary﻿block﻿of﻿dismissals﻿for﻿economic﻿reasons﻿has﻿been﻿issued,﻿combined﻿with﻿ directives﻿guiding﻿companies﻿ towards﻿the﻿use﻿of﻿remote﻿work,﻿whenever﻿feasible,﻿and﻿ a﻿ massive﻿ recourse﻿ to﻿ short-time﻿ work﻿ compensation﻿ schemes.﻿ Other﻿ measures﻿ have﻿ involved﻿financial﻿support﻿for﻿the﻿self-employed,﻿unprecedented﻿extensions﻿of﻿leave﻿for﻿ parents﻿to﻿cope﻿with﻿the﻿closing﻿of﻿schools,﻿and﻿special﻿health﻿and﻿safety﻿measures﻿when﻿ work﻿is﻿to﻿be﻿performed﻿upon﻿the﻿physical﻿premises﻿of﻿the﻿employer.﻿


Introduction
Following on the declaration of an international emergency of public health made by the World Health Organization on 30 January 2020,theItalianGovernmentdeclaredastateofemergencyon31Janu-ary2020,almostamonthbeforealargecoronavirusoutbreakcameto light. The first containment measures were enacted on 23 February, aimed at limiting the circulation of people and imposing social distancing;thescope-geographicalandsubstantial-ofthesemeasures wasthenexpanded,uptothedeclarationofthelockdownofallnon-essentialactivitieson22March.
This article will focus on the labour law construct for the emergency,deemedtobedismantledaftertheendofthepandemic.Ithas beenbasedontheassumptionthatalockdownofnon-essentialactivities was inevitable and so was the sacrifice of work and businesses, sinceordinaryorevenextraordinaryhealthandsafetymeasureswere consideredinsufficienttocopewiththeoutbreak. 3 The most iconic measure of the approach chosen by the Italian Government,whichkeepsthewholelabourlawconstructtogether,is thebanonmassredundanciesandindividualdismissalsforeconomic reasons from 17 March 2020 and progressively extended to 31 March  O.Bonardi,U.Carabelli,M.D'Onghia,L.Zoppoli(eds.), Roma,2020,pp.21-22. 3  The overall idea is that of maintaining the employment level, notwithstanding the sharp slowdown of business and professional activities. This was a target only partially achieved, since the ban on dismissalsinvolvedonly"standard"employees,withopen-endedcontracts. It is therefore not a surprise that according to recent statistics, manytemporary,casual,andseasonalworkers,dependentcontractors and,obviously,informalworkershavebecomeunemployed. 5 Thelatter have been particularly hard hit by the limits on free movement, even those employed in essential activities (i.e. the agro-food industry),sincetheycouldnotlawfullycommutetoworkbecausetheywere notregularlyemployed.
Alongside the suspension of dismissals, as for labour and social securitylaw-relatedmeasures,theItaliananswertothepandemichas beenbasedonthreemacro-policies 6 : • Massiveuseofremotework,wheneverfeasible( § 2). • Where businesses closed down or reduced their activity -and remote work was not an option -the remedy has been easier access to short-time work compensation schemes and the provision of financialhelpforself-employedworkers( § 3).
Italy has a comprehensive regulation for remote working. It includes quite old legislation on home-working, still in force, 7 plus a statutory regulation of teleworking for the public sector and collectivebargainingprovisionsfortheprivatesector. 8 Themainpurposeof theseregulationsistopreventmisclassificationofremoteworkersinto independent contractors, given the reduced control involved, and to providespecialrulesonH&S,workingtime,andemployees'privacy.
More recently, in 2017, the legislature decided to regulate "agile" work, following on the elaboration of collective bargaining, as a peculiar execution mode of the employment relationship agreed by the parties,organisedbystages,cyclesandobjectives,withoutstricttime andplaceconstraints,andpossiblyinvolvingtheuseoftechnological tools for carrying out the work activity, partly outside the business premises, without a fixed location. "Agile" ways of performing work shouldbeabletoimprove,inthevisionofthelegislature,atthesame time,work-lifebalanceandcompanies'competitivity. 9 Thisissupposedlyachievedbydecreasingcompanies'costsrelatedtorealestateand increasingworkers'flexibilityoforganization,autonomy,responsibilityandultimatelysatisfaction,thusincreasingtheirproductivity.

Short-time work compensation schemes and other forms of financial help for businesses
Given the generalized block of dismissals for economic reasons, wherecompanieshavehadtosuspendorreducetheiractivities,shorttimeworkcompensationschemeshavecomeintoplay.
Italy has a well-established short-time work program, pursuant to which employees receive from a public fund (wage guarantee fund) asubsidyproportionaltothereductioninhours:normally80%oftheir wagewithacap(roughly1,400€).Employeesarepaidinadvanceby firms, which can balance out the amounts paid to the workers with contributions due the social security starting from the subsequent month.Itisgenerallyreservedtotheindustrialsectorandcompanies employing at least 15 employees, conditional upon a prior information-consultation procedure with company union representatives and tradeunions.
Starting from mid-March, short-time work has been extended to almost all employers affected by the COVID-19 crisis, with few exceptions(i.e.domesticworkers),andtheexclusionofmanyoftheor-dinary conditions required for the activation of the scheme. Among those, from mid-April, the information-consultation procedure has been excluded, while initially it was supposed to take place digitally. Thedurationoftheinterventionwasinitiallysetfor9weeks,extenda-blefor4moreweeksbetweenSeptemberandOctober2020,inaccord-ancewithanewdecreeapprovedon19May2020(no.128),andthen againforsixmoreweeksuntill31January2021byaDecreeapproved on 28 October 2020 (no. 137). 15 On the employer's request, payments toemployeesareprovideddirectlybytheadministration,sotorelieve liquiditypressuresonfirms.
Asexpected,therehasbeenamassiveincreaseinuptakecompared with even the Great Recession. According to recent data: it has con-cerned7.3millionemployees,whichisalmostonethirdoftheItalian total employment. The cost to the public budget is around 6.2 billion euros a month and the employees' wage reduction is estimated at around 3.5 billion. It is not difficult to imagine the impact on Italian outstandingpublicdebtandanalreadyweakeconomy,givenalsothe reductioninthepurchasingpowerofpeople.

Health and safety prescriptions
When work is performed on the employer's premises, special healthandsafetyprescriptionsshouldbeinplace.Theystemfromthe generic duty of care imposed by article 2087 of the civil code, under which the employer is committed to put in place "all security measures"inordertoguaranteethesafetyofemployees,andbythemore specific prescriptions of the H&S consolidated act (Legislative decree no.81/2008),includingprotectionfromexposuretobiologicalrisk.
Precise prescriptions dedicated to COVID-19 have been imposed bycollectiveagreements.Firstandforemost,thereisaprotocolsigned by the Government and social partners on 14 March and revised on 24Aprilinconsiderationoftheapproachtotheso-calledsecondphase. Thosemeasureshavebeenimplementedandsupplementedbyanumber of sectoral collective agreements, local agreements and company levelagreements.

Conclusions
The Italian government has had a particularly difficult task, espe-ciallysinceItalywasoneofthefirstcountriestofacealargeandsudden coronavirus outbreak, making it impossible to learn from the experienceofothers.Relyingonshort-timeworkcompensationschemes coupledwithageneralizedmoratoriumonlayoffshasprobablybeen therightthingtodo.Accordingtosomeeconomicanalyses,short-time workschemesaremuchmoreeffectivethanotherformsofinsurance suchasunemploymentinsuranceoruniversaltransfers,andmoreefficientthanotherformsofwagesubsidies. 16 Another positive aspect of the action of the Italian Government is that, unlike other national Governments, 17 it has refrained from any temptationtochangelabourlawrules,andtoprovidemorederegulationonthepretextthatthesituationrequiredit.
There are, however, some issues related to the measures taken so far,whichwouldperhapsrequiresomeadjustments.
Firstofall,thecurrentsituationisincreasingtheinsiders-outsiders division. Adopting a rather case-by-case approach, the Government has tried a comprehensive, but quite fragmented and not always reasonable,distributionofmonetarysupportforthoseaffectedbythecrisis.Notably,thoseengagedonatemporaryorcasualbasis,including dependentcontractors,whohavelosttheiremploymenthavenotbeen abletorelyonthesameassistanceas"standard"employees.Thesame hasobviouslybeentrueforinformalworkers,whoarenotconsidered at all by public welfare. The crisis has therefore reminded us that we areveryfarfromarealandcompleteuniversalizationofsocialprotections. On the contrary, the current emergency approach has emphasizedthedifferencesinsocialprotectionsbetweensectorsandworkers.
The most relevant issue is the financial sustainability of the measures undertaken. They are artificially keeping alive many jobs, with a non-negligible impact on the Italian outstanding public debt. However,dismissalscannotbeblockedforeverandthefinancialresources areanythingbutunlimited.